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December 2016

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The Council of Textile and Fashion Industries of Australia (TFIA) is frustrated that the Gillard government's carbon pricing policy has failed to take into account the severe pressures being faced by one of Australia's most trade-exposed industries.

“Textiles, Clothing and Footwear (TCF) is one of the most important employers in this country,” TFIA CEO Jo Kellock says. “But its profitability has been undermined by successive governments.”

The TCF industry plays an important role in providing regional employment and is a key employer for unskilled female workers and those entering the employment market.

However, its viability has been eroded over the past few decades by the steady decline in tariffs on imported goods and inadequate policy frameworks to stem the shift to offshore production.

Clothing and textiles manufacturing has been particularly hard hit, points out Ms Kellock.

“Manufacturers have been hit from all sides – with rising Australian dollar, increase in cost of raw materials, the rise in labour costs and the heavy competition from imports. There are so many factors that are making it incredibly difficult to keep manufacturing here.”

The lack of support for this industry to help it negotiate through this latest imposition may well be the tipping point for many remaining companies, she adds.

While the industry strongly supports a sustainable low carbon approach, the current carbon pricing policy will submit the industry to further cost pressures that it has no option but to absorb. “This is a very trade-exposed industry,” Ms Kellock says. “With all the competition from importers, TCF manufacturers are not in a position to pass on added costs by raising prices.”

The carbon price will hit manufacturers around 12 months after the SIP scheme has been wound up, Ms Kellock points out. “Other industries are being promised huge compensation programs to counter the impact of carbon pricing which has buoyed their outlook, while TCF manufacturing is apparently being asked to absorb the additional costs with limited means to offset them, a daunting proposition,” she points out.

The concern is that compensation may be too little too late. It is essential to retain a vital and viable TCF manufacturing base in this country, she adds. “Apart from its significant employment base, we also rely on the ability of local TCF manufacturers to supply important areas such as our emergency services with uniforms – not to mention the importance of having an industry that can respond quickly to retail orders and deliver quality products that the consumer can be confident are safe.”